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Friday, December 26, 2008

Home Base Businesses Numbers Continue to Grow

Home based business opportunities are growing daily, along with a new spirit of entrepreneurialism and independence. Today’s technology is making working from home far more common today than just a decade ago. Though the general consensus is that more people are working from their homes than ever, finding solid data to prove this can be difficult.

Because things change so quickly, much of the data, collected two to four years ago, may be inaccurate.

The latest statistics from the U.S. Department of Labor are from 2004, but already show a growing trend for men and women working primarily at home. In that year 20.7 million people worked, at least part-time, from their homes most working for another company. About 7 million of those were self-employed…in other words, they were home-based business owners. The average work week for someone working at home, according to the study, was 25 hours, and most were professionals, such as people who offered consulting services or sales related businesses. Another huge chunk of the at-home pie are those working in the construction industry.

Though the general belief may be that women far outnumber men working at home, this is not the case. Men and women were about equally likely to work out of their home, and there are more parents working at home than singles.

And, according the Labor Department, home-based businesses are run by educated folks. People with a bachelor’s degree or higher were more than six times as likely to work out of their home than those without college degrees. This is likely because it is easier for someone with a management background to transition to a work-at-home job.

This trend of working at home is partly due to advances in electronics. Most homes have computers with high-speed internet connections. Most people have the basic computer skills to put together a rudimentary website. And information is so readily available, the resources available to someone wanting to work from home are numerous and inexpensive. Also, there are more and more opportunities for people wanting to work from home.

In addition, it’s become a much more accepted way of doing business. With the increase in the number of businesses run from homes, it is much more commonplace.

According to the NBBTA.org, the online arm of the

National Black Business Trade Association, home based business represents a $427 billion industry (this figure exceeds another figure found on this subject). That exceeds the pharmaceutical, food, and consumer goods industries---combined.

Home-based businesses are considered small businesses. The Small Business Administration estimates that 52 percent of all small business are home-based---and small businesses (those with less than 500 employees) represents 99.7 percent of all employer firm. The home-based businesses, according to 2007 SBA report, generate $102 billion in revenue. Home-based businesses owners earned less than their counterparts who work outside the home, $22,569 compared to $38,243, but their earnings were worth more, which evened out the playing field. “Due to lower expenses, particularly in rent and labor costs, the average home-based sole proprietor consistently gained a higher return on gross revenues at 36 percent, versus 21 percent for the non-home-based,” the report said.

Getting accurate reporting on home-based businesses is difficult, but the general consensus is that this is an area of the U.S. economy that will continue to grow, especially during an economic downturn where traditional jobs are more difficult to find.

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